What's in a name? Money

Five sports venues are looking to sell naming rights next year

The Bears are shopping naming rights to an addition to their practice facility.

Chicago's sports teams will be playing a name game in 2014.

United Airlines got the ball rolling last week with a new pact to plaster its name on the United Center for another two decades. But five other major sponsorship contracts are either expiring or up for bidding next year, a rare glut in a single market. All the sellers—the Chicago Bears, Chicago Bulls, Chicago Cubs, DePaul University and the village of Rosemont—are seeking high six- or seven-figure annual deals, setting up an array of options for businesses interested in making a splash in the local sports conversation. Experts are calling it a “perfect storm” that gives brands leverage by being able to comparison shop for sports investments that typically hit the market only every few years. The result has been a lengthier negotiating process that is forcing sellers to differentiate their offerings from local competition and prove companies' return on investment.

“There are options to talk about and consider, which complicates the marketplace,” says Jim Andrews, senior vice president of Chicago-based sports marketing firm IEG LLC, which is working with the Cubs to sell a flood of new advertising opportunities associated with the $500 million renovation of Wrigley Field and redevelopment of the surrounding area.

Deals that used to take 12 months to complete from the time teams go to market now can take twice as long “because they're more complex and signoffs are coming from higher up in the company,” Mr. Andrews says, adding that the array of opportunities in Chicago “certainly exacerbates the situation.”

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Sports naming rights deals have been heavily scrutinized since the recession with corporations forced to justify the benefits of putting their names up in lights. As a result, most new deals involve more than just the name of a building. Venue owners and teams are sweetening deals with perks ranging from prominent advertising placement to the use of luxury suites and facilities for corporate entertainment.

The Bears are seeking a 10-year naming rights partner for the recently completed 30,000-square-foot addition to the Halas Hall practice facility in Lake Forest. The team could net anywhere from $500,000 to $2 million annually, based on comparable deals at other NFL practice facilities. Since public exposure to the building would be limited, the team is offering “turnkey” experiences such as watching practices from a suite or using event space for meetings.

“It's a busy sponsorship sales market right now,” says Chris Hibbs, Bears vice president of sales and marketing, who went to market with the Halas Hall deal early this year and had hoped to lock in a partnership by summer. “There are a lot of smart people and great brands in town, and (the number of options) has an impact on everybody.”

To demonstrate the benefits a company might get from paying millions of dollars for exposure to fans and tourists milling around Wrigleyville, the team spent more than $1 million to build a “presentation room” at its office, complete with a 103-inch touch-screen monitor and a scale model of the renovated stadium to help buyers picture the signage.

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United Airlines' name will remain on the United Center for another two decades.

Photo: Manuel Martinez

Former Cubs marketing chief Wally Hayward, whose W Partners is selling the sponsorship deals on behalf of the team and its owners, the Ricketts family, enlisted IEG to help price them based on comparable deals elsewhere. But he says the other Chicago teams' opportunities haven't been part of the discussions.

The Bulls have been searching for a naming rights partner for their 60,000-square-foot practice facility east of the United Center since announcing the project in fall 2012, a deal experts value at $1 million a year. (The new deal at the main building is worth about $5.8 million annually, according to Chicago-based Navigate Research.) DePaul's new arena, which is slated to break ground late next year or in early 2015, might command between $1 million and $2 million annually. The school could also try to find a private donor who might make a much larger gift that would include long-term naming rights.

On top of those, Allstate Corp.'s contract with Allstate Arena in Rosemont, worth $1.4 million this year, expires in 2014. The village of Rosemont is in negotiations with the insurance company about renewing the deal. Representatives from multiple companies that are active in purchasing naming rights—including State Farm Insurance Cos., Allstate, United, Verizon Wireless and BMO Harris Bank NA—declined or were unavailable to discuss whether they were making a play for any of the local deals.

While the local menu is long, these companies won't necessarily see bargain prices. Each team is playing up the unique demographics of its audience.

“They'll face some pressure from buyers, but the target markets can be quite different,” says Guy Port, vice president of sales at New York-based sports sponsorship research company Repucom America, which has worked with the Bears, Cubs, Blackhawks and White Sox. “A fit for a brand with the Bulls and Blackhawks audience might not fit with the target market for the other properties.”